Regulators Fine Wells Fargo $1 Billion for Abusing Consumers

As a congressman, Mick Mulvaney called the Consumer Financial Protection Bureau (CFPB) a “sick, sad joke.” Since he became the acting director of the watchdog agency last fall, Mulvaney has worked tirelessly to prove himself right.

Under the far-right Republican’s watch, the CFPB has dropped a lawsuit against a group of online payday lenders who’d (allegedly) tricked low-income consumers into taking on loans with interest rates as high as 950 percent a year; signaled that it will abolish a rule that requires payday lenders to verify a borrower’s ability to repay loans within 45 days; called off an investigation into an installment lender whose business model depends on giving bad financial advice to heavily indebted poor people; and stripped the federal office in charge of policing racial discrimination in lending of its enforcement powers.

So it was more than a little (pleasantly) surprising Friday, when the bureau handed out the largest fine in its history – to a major Wall Street bank that has donated large sums of money to Republican political campaigns.

Earlier today, the CFPB and Office of the Comptroller of the Currency imposed a $1 billion fine on Wells Fargo for a variety of abuses perpetrated against consumers of its auto loan and mortgage products. What’s more, the OCC forced America’s third-largest bank to submit to an unprecedented order that gives regulators authority to take a wide range of actions to prevent further abusive practices, “including imposing business restrictions and making changes to executive officers or members of the bank’s board of directors.”

Wells Fargo will also be required to update regulators on how it intends to identify customers who were hurt by its predatory tactics, and how it intends to compensate them for their losses.

To be sure, the enforcement action still leaves something to be desired (specifically, the sight of culpable Wells Fargo executives in handcuffs). But it would qualify as a robust penalty under any recent administration, let alone under Donald Trump’s.

One answer is, “passively.” After all, it’s not like this was Mick Mulvaney’s baby. The CFPB began its investigation into Wells Fargo on Richard Cordray’s watch — a point that the Democratic gubernatorial candidate was eager to emphasize Friday, saying in a statement, “To suggest this is the work of Mulvaney, who has done nothing but throw sticks in the spokes of a talented, hard-working CFPB team of devoted public servants is preposterous.”

A supplementary explanation is that Wells Fargo’s misconduct was so prolific — and high-profile — Mulvaney didn’t feel comfortable sabotaging the bureau’s enforcement action against the bank. Among Wells Fargo’s offenses: deceptively getting 570,000 clients to sign up for expensive car insurance that they didn’t need, which led as many as 20,000 to default on their auto loans. Separately, the bank also charged 110,000 of its mortgage borrowers for failing to meet a deadline for locking in their interest rates, even though the bank itself was responsible for the relevant delays.

And these offenses came on top of the bank’s now-infamous former habit of charging millions of Americans for accounts they never opened — which itself, came on top of the bank’s infamous habit of forcing African-American borrowers (whom Wells Fargo officers referred to as “mud people”) into subprime loans in the run-up to the 2008 financial crisis.

By the time the CFPB and OCC announced their fines this week, Wells Fargo’s white-collar criminality had already earned it an unprecedented punishment from the Federal Reserve, which announced in February that it would not allow the bank to take on any more assets than it held last year, until it has proven itself a responsible lender.

All this said, there’s another, more concerning theory for the Trump administration’s aberrantly robust enforcement action against Wells Fargo: News stories about the bank caught Trump’s attention, he tweeted about it, and so Mulvaney allowed regulators to go after a company that had caught the boss’s ire. As ProPublica’s Jesse Eisinger, whose reporting helped expose Wells Fargo’s misdeeds, notes:

Still, there’s a pretty big distinction between the two cases Eisinger cites: Trump’s personal opposition to the Time Warner deal was motivated by his antipathy for how CNN covered his administration. His desire to punish Wells Fargo, by contrast, appears rooted in the perception that beating up on the bank would benefit him politically — which is about as pure a motive as you’re going to get from this particular elected representative.

Jared Kushner, the president’s son-in-law and senior adviser, uses an unofficial online messaging service for official White House business, including with foreign contacts, his lawyer told the House Oversight Committee late last year.

The lawyer, Abbe Lowell, said he was not aware if Mr. Kushner had communicated classified information on the service, WhatsApp, and said that because he took screenshots of the communications and sent them to his official White House account or the National Security Council, his client was not in violation of federal records laws.

In a letter disclosing the information, the Democratic chairman of the House Oversight and Reform Committee said that he was investigating possible violations of the Presidential Records Act by members of the Trump administration, including Mr. Kushner and his wife, Ivanka Trump. He accused the White House of stonewalling his committee on information it had requested for months.

Sen. Joni Ernst (R-Iowa) on Thursday urged President Donald Trump to stop disparaging the late Sen. John McCain, calling the Vietnam war hero “a dear friend” and defending him against the president’s criticisms. …

Ernst’s remarks came during a town hall meeting at a high school in Adel, Iowa, where several attendees voiced anger about Trump’s attacks about McCain. One attendee described McCain as a “genuine war hero” and called Trump’s comments about McCain “cowardly.”

“I do not appreciate his tweets,” Ernst said, when pressed by the attendee why she didn’t previously speak out more forcefully. “John McCain is a dear friend of mine. So, no I don’t agree with President Trump and he does need to stop.”

As we anticipate the end of Mueller, signs of a wind-down:-SCO prosecutors bringing family into the office for visits-Staff carrying out boxes-Manafort sentenced, top prosecutor leaving-office of 16 attys down to 10-DC US Atty stepping up in cases-grand jury not seen in 2mo

For Boeing and other aircraft manufacturers, the practice of charging to upgrade a standard plane can be lucrative. Top airlines around the world must pay handsomely to have the jets they order fitted with customized add-ons.

Sometimes these optional features involve aesthetics or comfort, like premium seating, fancy lighting or extra bathrooms. But other features involve communication, navigation or safety systems, and are more fundamental to the plane’s operations.

Many airlines, especially low-cost carriers like Indonesia’s Lion Air, have opted not to buy them — and regulators don’t require them. Now, in the wake of the two deadly crashes involving the same jet model, Boeing will make one of those safety features standard as part of a fix to get the planes in the air again.

… Boeing’s optional safety features, in part, could have helped the pilots detect any erroneous readings. One of the optional upgrades, the angle of attack indicator, displays the readings of the two sensors. The other, called a disagree light, is activated if those sensors are at odds with one another.

Boeing will soon update the MCAS software, and will also make the disagree light standard on all new 737 Max planes, according to a person familiar with the changes, who spoke on condition of anonymity because they have not been made public. The angle of attack indicator will remain an option that airlines can buy.

Attorneys for New England Patriots owner Robert Kraft and more than a dozen other defendants charged in a Florida prostitution sting filed a motion to stop the public release of surveillance videos and other evidence taken by police.

Attorneys filed the motion Wednesday in Palm Beach County court. The State of Florida does not agree with the request, according to the filing.

In the motion, the attorneys asked the court to grant a protective order to safeguard the confidentiality of the materials seized from the Orchids of Asia Day Spa in Jupiter, and “in particular the videos, until further order of the court.”

Two years in, White House aides are dismayed to discover the president likes lobbing pointless, nasty attacks at people like George Conway and John McCain

But the saga has left even White House aides accustomed to a president who bucks convention feeling uncomfortable. While the controversies may have pushed aside some bad news, they also trampled on Trump’s Wednesday visit to an army tank manufacturing plant in swing state Ohio.

“For the most part, most people internally don’t want to touch this with a 10-foot pole,” said one former senior White House official. A current senior White House official said White House aides are making an effort “not to discuss it in polite company.” Another current White House official bemoaned the tawdry distraction. “It does not appear to be a great use of our time to talk about George Conway or dead John McCain. … Why are we doing this?

When Mr. Trump was running for president, he promised to personally stop American companies from shutting down factories and moving plants abroad, warning that he would punish them with public backlash and higher taxes. Many companies scrambled to respond to his Twitter attacks, announcing jobs and investments in the United States — several of which never materialized.

But despite Mr. Trump’s efforts to compel companies to build and hire, they appear to be increasingly prioritizing their balance sheets over political backlash.

“I don’t think there’s as much fear,” said Gene Grabowski, who specializes in crisis communications for the public relations firm Kglobal. “At first it was a shock to the system, but now we’ve all adjusted. We take it in stride, and I think that’s what the business community is doing.”

There’s no specific stipulation that Milo must be heard, so it could be worse

President Trump is expected to issue an executive order Thursday directing federal agencies to tie research and education grants made to colleges and universities to more aggressive enforcement of the First Amendment, according to a draft of the order viewed by The Wall Street Journal.

The order instructs agencies including the Departments of Education, Health and Human Services and Defense to ensure that public educational institutions comply with the First Amendment, and that private institutions live up to their own stated free-speech standards.

The order falls short of what some university officials feared would be more sweeping or specific measures; it doesn’t prescribe any specific penalty that would result in schools losing research or other education grants as a result of specific policies.

Tech companies say that it is easier to identify content related to known foreign terrorist organizations such as ISIS and Al Qaeda because of information-sharing with law enforcement and industry-wide efforts, such as the Global Internet Forum to Counter Terrorism, a group formed by YouTube, Facebook, Microsoft, and Twitter in 2017.

On Monday, for example, YouTube said on its Twitter account that it was harder for the company to stop the video of the shootings in Christchurch than to remove copyrighted content or ISIS-related content because YouTube’s tools for content moderation rely on “reference files to work effectively.” Movie studios and record labels provide reference files in advance and, “many violent extremist groups, like ISIS, use common footage and imagery,” YouTube wrote.

The cycle is self-reinforcing: The companies collect more data on what ISIS content looks like based on law enforcement’s myopic and under-inclusive views, and then this skewed data is fed to surveillance systems, Bloch-Wehba says. Meanwhile, consumers don’t have enough visibility in the process to know whether these tools are proportionate to the threat, whether they filter too much content, or whether they discriminate against certain groups, she says.

Two mystery litigants citing privacy concerns are making a last-ditch bid to keep secret some details in a lawsuit stemming from wealthy financier Jeffrey Epstein’s history of paying underage girls for sex.

Just prior to a court-imposed deadline Tuesday, two anonymous individuals surfaced to object to the unsealing of a key lower-court ruling in the case, as well as various submissions by the parties.

Both people filed their complaints in the New York-based 2nd Circuit Court of Appeals, which is overseeing the case. The two people said they could face unwarranted speculation and embarrassment if the court makes public records from the suit, in which Virginia Giuffre, an alleged Epstein victim, accused longtime Epstein friend Ghislaine Maxwell of engaging in sex trafficking by facilitating his sexual encounters with teenage girls. Maxwell has denied the charges.